Espirito Santo Rises on ECB Intervention Benefits: Lisbon Mover
Banco Espirito Santo SA (BES) rose the most in a month after JPMorgan Chase & Co. recommended investors buy shares in Portugal’s biggest publicly traded bank to benefit from possible European Central Bank intervention in the country.
Banco Espirito climbed as much as 4.8 percent in Lisbon trading, the biggest intraday gain since Nov. 1. The stock was up 4.2 percent to 79.9 cents as of 1:20 p.m. local time, with volume at about 90 percent of the three-month daily average, giving the lender a market value of 3.21 billion euros ($4.2 billion).
“We consider BES is the best option to play this event in the European periphery as the benefits from lower funding costs would offset a very weak domestic economy,” Jaime Becerril, an analyst at JPMorgan in London, wrote in a note today.
Becerril raised his recommendation for Espirito Santo to overweight from neutral and said JPMorgan expects ECB intervention in Portugal to take place in the first quarter of 2013. ECB President Mario Draghi said in September bond purchases may be considered for euro-area countries currently under bailout programs, such as Greece, Portugal and Ireland, when they regain bond-market access.
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